A tariff is a tax imposed on

1. Analyze the question The question asks what a tariff is charged on. This is a definition question from International Trade.

2. Explain the concept A tariff is a tax or duty placed on goods when they cross a country's border, specifically when they come into the country. It is also called an import duty or customs duty.

Governments use tariffs to:

• Protect local (infant) industries from foreign competition
• Raise government revenue
• Correct a deficit in the balance of payments
• Discourage the consumption of certain foreign goods

3. Work through the options

• A. Consumer goods: Wrong. A tariff is not defined by the type of good. It can fall on consumer goods, capital goods or raw materials, but only if they are imported.
• B. Domestic goods: Wrong. Taxes on goods made and sold inside the country are called excise duties or sales/value-added taxes, not tariffs.
• C. Imported goods: Correct. A tariff is a tax on goods brought into the country from abroad.
• D. Exported goods: Wrong. A tax on exports is called an export duty, which is different from a tariff in the usual sense. Nigeria has used export duties on commodities like cocoa and groundnuts in the past.

4. Answer The correct option is C. Imported goods.

5. Exam tip Remember: Tariff = Tax on Trade coming In. Think "T" for Tariff and "T" for Tax on imports. If you see "import duty" or "customs duty", it means tariff. If you see "export duty", read the question carefully, because it is a different term.